Gov. Scott signs ban on gaming centers

A man approaches the Palms Internet Cafe on Southwest State Road 200 in this file photo from March 25, 2013.

Alan Youngblood/Star-Banner

By Zac AndersonTallahassee Bureau

Published: Wednesday, April 10, 2013 at 1:47 p.m.

Last Modified: Wednesday, April 10, 2013 at 1:47 p.m.

TALLAHASSEE — Don't expect a rash of police raids and empty storefronts even though Gov. Rick Scott has signed legislation outlawing simulated slot parlor “Internet cafes” — at least not right away. It could take months — even years — for the ban to unfold, depending on how aggressively the café owners fight in court.

An industry that has proliferated over a decade, growing to hundreds of locations in Florida and an estimated $1 billion in revenues, is not likely to disappear overnight after Scott signed the ban into effect Wednesday.

Internet café owners fought a similar ban in North Carolina for two years, ultimately losing in the state Supreme Court last December. Café owners continued to operate during the legal battle. Many ignored the ruling and are still open, according to media reports, a result of sporadic enforcement and cafes altering their gaming software to circumvent the law.

Florida's ban also is likely to withstand any legal challenges, experts say. But whether the cafes shut down quickly or try to morph their operations and fight on for months or years is still unclear. The details could vary from county to county and city to city.

Much will depend on how aggressive local law enforcement officers are in enforcing the ban, and the legal and technological maneuvers the industry use in response.

Sarasota County Sheriff Tom Knight and Manatee County Sheriff Brad Steube said this week they plan to spend time getting familiar with the new law before ramping up enforcement. Both also are likely give café owners some warning before getting tough.

“We certainly don't have any intention of using SWAT teams to kick these doors in the first day it goes into effect,” Knight said. “That's not how we operate here.”

Sheriff's deputies in both Sarasota and Manatee have raided the cafes in the past and confiscated machines, only to see their court cases fall apart because of ambiguities in state law.

Steube said he is happy to finally have some clarity in the law regulating Internet cafes, which use computer terminals to simulate slot machine gambling and pay out in cash. Similar operations that offer gift cards are also banned.

“This is what law enforcement has been asking for for years,” he said.

Steube expects there to be some kind of “waiting period” in Manatee County when café owners will be informed about the new legislation and instructed on how to comply with the law.

“I don't know what the time period might be; it might be 15 days or 30 days and then we'll go do an inspection,” Steube said.

Sheriff's officials have counted more than two dozen Internet cafes in Manatee County. A similar number are operating in Sarasota County, according to café owners.

Jason Honea owns or manages seven cafes in the region. He plans to keep his doors open until law enforcement comes knocking.

“I'm going to stay in operation until the sheriff tells me to shut down,” he said.

Honea criticized the ban, saying it will be bad for the economy. He has 30 employees. Each cafe pays up to $4,000 a month in rent and contracts with a variety of local companies for goods and services.

Michael Cutler rents a 3,000-square-foot building to Honea in Osprey. He's worried about losing a good tenant when the commercial vacancy rate is nearly 20 percent in Sarasota and Manatee counties.

Cutler has commercial space he's been trying to rent since 2008. Honea has been a stable tenant for five years.

“They pay the mortgage for me,” Cutler said. “They are my No. 1 tenant. It will be extremely painful.”

Honea said he is contemplating legal action to try to stay in operation.

“There are several people pursuing legal options and we are considering joining several of them,” he said.

Nova Southeastern law school professor Bob Jarvis, an expert on gambling law in Florida, said the cafes may be able to buy some time with legal maneuvers but he doesn't expect them to have success.

“At the end of the day it's very clear gambling is a prerogative of the state and the state can always ban gambling,” Jarvis said.

Café operators tried to fight the ban in North Carolina by arguing it violated free speech.

“The North Carolina Supreme Court said that's absurd,” Jarvis said. “It has nothing to do with speech at all, it has to do with illegal gambling.”

Yet hundreds of cafes continue to operate across North Carolina, according to a recent report in the News & Observer, a Raleigh, N.C., newspaper. Crackdowns have been sporadic across the state, with no coordinated effort. And gaming companies have evolved their software to stay ahead of the law.

Jarvis said some Florida café operators undoubtedly will continue to test their luck and the patience of law enforcement. Some may avoid prosecution for a while, but he expects the industry to eventually fade away.

<p>TALLAHASSEE — Don't expect a rash of police raids and empty storefronts even though Gov. Rick Scott has signed legislation outlawing simulated slot parlor “Internet cafes” — at least not right away. It could take months — even years — for the ban to unfold, depending on how aggressively the café owners fight in court.</p><p>An industry that has proliferated over a decade, growing to hundreds of locations in Florida and an estimated $1 billion in revenues, is not likely to disappear overnight after Scott signed the ban into effect Wednesday.</p><p>Internet café owners fought a similar ban in North Carolina for two years, ultimately losing in the state Supreme Court last December. Café owners continued to operate during the legal battle. Many ignored the ruling and are still open, according to media reports, a result of sporadic enforcement and cafes altering their gaming software to circumvent the law.</p><p>Florida's ban also is likely to withstand any legal challenges, experts say. But whether the cafes shut down quickly or try to morph their operations and fight on for months or years is still unclear. The details could vary from county to county and city to city.</p><p>Much will depend on how aggressive local law enforcement officers are in enforcing the ban, and the legal and technological maneuvers the industry use in response.</p><p>Sarasota County Sheriff Tom Knight and Manatee County Sheriff Brad Steube said this week they plan to spend time getting familiar with the new law before ramping up enforcement. Both also are likely give café owners some warning before getting tough.</p><p>“We certainly don't have any intention of using SWAT teams to kick these doors in the first day it goes into effect,” Knight said. “That's not how we operate here.”</p><p>Sheriff's deputies in both Sarasota and Manatee have raided the cafes in the past and confiscated machines, only to see their court cases fall apart because of ambiguities in state law.</p><p>Steube said he is happy to finally have some clarity in the law regulating Internet cafes, which use computer terminals to simulate slot machine gambling and pay out in cash. Similar operations that offer gift cards are also banned.</p><p>“This is what law enforcement has been asking for for years,” he said.</p><p>Steube expects there to be some kind of “waiting period” in Manatee County when café owners will be informed about the new legislation and instructed on how to comply with the law.</p><p>“I don't know what the time period might be; it might be 15 days or 30 days and then we'll go do an inspection,” Steube said.</p><p>Sheriff's officials have counted more than two dozen Internet cafes in Manatee County. A similar number are operating in Sarasota County, according to café owners.</p><p>Jason Honea owns or manages seven cafes in the region. He plans to keep his doors open until law enforcement comes knocking.</p><p>“I'm going to stay in operation until the sheriff tells me to shut down,” he said.</p><p>Honea criticized the ban, saying it will be bad for the economy. He has 30 employees. Each cafe pays up to $4,000 a month in rent and contracts with a variety of local companies for goods and services.</p><p>“We're contributing to the economy, we're providing jobs, we're paying leases, we're buying food from Sam's Club," Honea said.</p><p>Michael Cutler rents a 3,000-square-foot building to Honea in Osprey. He's worried about losing a good tenant when the commercial vacancy rate is nearly 20 percent in Sarasota and Manatee counties.</p><p>Cutler has commercial space he's been trying to rent since 2008. Honea has been a stable tenant for five years.</p><p>“They pay the mortgage for me,” Cutler said. “They are my No. 1 tenant. It will be extremely painful.”</p><p>Honea said he is contemplating legal action to try to stay in operation.</p><p>“There are several people pursuing legal options and we are considering joining several of them,” he said.</p><p>Nova Southeastern law school professor Bob Jarvis, an expert on gambling law in Florida, said the cafes may be able to buy some time with legal maneuvers but he doesn't expect them to have success.</p><p>“At the end of the day it's very clear gambling is a prerogative of the state and the state can always ban gambling,” Jarvis said.</p><p>Café operators tried to fight the ban in North Carolina by arguing it violated free speech.</p><p>“The North Carolina Supreme Court said that's absurd,” Jarvis said. “It has nothing to do with speech at all, it has to do with illegal gambling.”</p><p>Yet hundreds of cafes continue to operate across North Carolina, according to a recent report in the News & Observer, a Raleigh, N.C., newspaper. Crackdowns have been sporadic across the state, with no coordinated effort. And gaming companies have evolved their software to stay ahead of the law.</p><p>Jarvis said some Florida café operators undoubtedly will continue to test their luck and the patience of law enforcement. Some may avoid prosecution for a while, but he expects the industry to eventually fade away.</p><p>“Their day has passed,” he said.</p>